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SHANGHAI - Shanghai stocks fell on Friday but managed to notch their seventh straight week of gains, bolstered by the continued robust performance of resources firms.

The blue-chip CSI300 index fell 0.5% to 3,707.58 points, while the Shanghai Composite Index lost 0.3% to 3,262.08 points.

For the week, the CSI300 was down 0.4% while the SSEC gained 0.3%.

Material firms, whose earnings benefited from a construction boom and rising prices amid the government's push to trim excess capacity, pared gains in the afternoon as investors locked in profits following their rally. 

But the outperforming sector still gained 5.5% for the week.

China has vowed to deepen its structural reforms to cut excess capacity in inefficient sectors, which has tended to push up materials prices.

Investors are also awaiting a flurry of data in coming weeks that could show steady growth in China in July, even as the economy navigates a tighter policy environment.

Baoshan Iron & Steel, the country's largest steelmaker, advanced 4.1% to a more than 2-year high. The stock has gained 27.6% this year.

"The strong rally in cyclicals, including steelmakers and non-ferrous metals producers, is not over yet, as valuations for those firms remain low," Changjiang Securities said in a report.

In sharp contrast with the sustained strength in blue chips, start-up shares remained sluggish, with the ChiNext losing 0.8% on Friday, as slumping profits at leading tech firms turned investors away.

Speculation in small-cap shares with dim growth prospects has been gradually waning, as investors attach more importance to performance and fundamentals, the official Xinhua news agency reported, commenting on the recent developments in the stock markets.

Most sectors lost ground on Friday.

Consumer and real estate stocks dragged on the market, while gains were seen in industry and energy firms. 

- REUTERS